News for 31st July 2010 :: An open letter to the Watford Chamber of Commerce

Simpler taxes, lower tax rates

A reduction in the small profits rate (formerly known as Small
Companies’ rate) to 20%, instead of the last Government’s planned
increase to 22%, from April 2011.

An increase in the entrepreneurs’ relief life time limit for Capital Gains
Tax from £2 million to £5 million, effective immediately.

A reversal of the most damaging part of the increase in employer
National Insurance Contributions (NICs) inherited from the previous
Government. The threshold for employer NICs will rise by £21, above
indexation. This will increase the number of employees for whom
employers pay no NICs by 650,000.

A review of small business taxation, including IR35 regulations, to
create a simpler, more predictable tax regime

Less red tape, fewer regulators

A new system of regulation control whereby Ministers must first show
how they will reduce the existing burden of regulation before bringing
forward new regulations.

A fundamental review of all the regulations that the last Government
had scheduled for introduction over the coming year.

Regulations will cease to be law after seven years unless Parliament
has confirmed they are still necessary and proportionate, or they were
explicitly set to have a longer timeframe.

A review, by every department, of all employment law that they are
responsible for and unnecessary Health & Safety regulations.

Tackling ‘gold-plating’ of EU regulations and ensuring that new
proposals for EU regulation are costed at an early stage, to try to
ensure that UK business is no longer put at a disadvantage with its
competitors.

Helping new firms start

Enabling social tenants to start their own business at home, by
removing unnecessary regulations and controls.

Making it easier to employ people. A three year scheme whereby new
businesses starting up in selected regions (Scotland, Northern Ireland,
Wales, and the following areas of England – North West, North East,
Yorkshire and Humber, West Midlands, South West and the East
Midlands) will not have to pay the first £5,000 of class 1 NICs due in
the first 12 months of employment. This will apply for each of the first
10 employees hired within the first year of trading.

Improving access to finance

The Enterprise Finance Guarantee (EFG) will be increased by £200
million to support £700 million of additional lending until 31 March
2011. In addition, a processing target of 20 business days will be
introduced for all major lenders participating in the EFG.

A Growth Capital Fund is being created to support established
businesses wanting to invest for the future.

The June Budget announced a Green Paper considering a broad range
of finance options for businesses of different sizes.

Together these measures represent positive action that will help the bottom
line of small and medium-sized businesses across the country. The list above
is not comprehensive and I expect there will be much more help for small and
medium-sized businesses announced in the autumn.
Best regards,
Richard Harrington MP
Watford

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